House Panel Subpoenas Democratic Fund-Raiser

By DON VAN NATTA Jr.

Published: April 17, 1999

WASHINGTON, April 16—
A Congressional committee sent a subpoena today to Johnny Chung, the former Democratic fund-raiser who has told Justice Department investigators that he funneled tens of thousands of dollars from two high-level Chinese military officials to President Clinton's re-election effort in 1996.

The House Committee on Government Reform received permission from the Justice Department to take the testimony of Mr. Chung, who is cooperating with prosecutors after pleading guilty to campaign-related bank and tax fraud. Justice Department lawyers have concluded that his public testimony on these matters will not jeopardize their continuing criminal inquiries.

''I'm glad we are finally going to have the opportunity to hear from one of the central figures in this story,'' said Representative Dan Burton, the Indiana Republican who heads the committee. The panel has spent two years searching for evidence that the Chinese Government tried to influence the 1996 Presidential election. Committee lawyers said today that they planned to call Mr. Chung to testify on April 27 and 28, and he has made clear that he is willing to appear.

Mr. Chung has told investigators that he met three times in 1996 with the chief of China's military intelligence agency, Gen. Ji Shengde, who directed that $300,000 be wired to Mr. Chung's bank account to be used as contributions to President Clinton's re-election campaign, officials familiar with Mr. Chung's statements to prosecutors say. The development was first reported this month by The Los Angeles Times.

Mr. Chung apparently contributed only $35,000 of the sum that he received from General Ji to the Democratic Party and deposited the rest into one of his bank accounts in August 1996, lawyers said. It is unclear how the remainder of the money was spent.

Mr. Chung, a Taiwan-born businessman who is now an American citizen, is a central figure in the campaign finance scandal. Despite being labeled a ''hustler'' by a wary National Security Council official, Mr. Chung was a frequent White House visitor whose $400,000 in contributions to the Democratic National Committee and the Clinton-Gore re-election campaign were returned when questions were raised about their legality.

The committee's two-and-a-half-year-old investigation of campaign finance abuses has been thwarted by major witnesses' refusing to testify or fleeing the country. Mr. Burton said today that he had high hopes that Mr. Chung's testimony would break new investigative ground. For the Republican-led committee, Mr. Chung's story will serve to remind the public of the Democrats' 1996 fund-raising embarrassments at the same time Vice President Al Gore is busily raising money for his Presidential race in 2000.

Mr. Chung has told investigators that he was introduced to General Ji by Liu Chaoying, an aerospace executive and a lieutenant colonel in China's Army. Her father was Gen. Liu Huaqing. At the time, General Liu was China's top military commander and a member of the leadership of the Communist Party.

Last year, The New York Times reported that Mr. Chung had told prosecutors that ''tens of thousands of dollars'' of his contributions to the Democrats were given to him by Ms. Liu. Under American law, foreign governments are prohibited from contributing to political campaigns.

In a letter to Attorney General Janet Reno, Mr. Burton complained that several news reports, which he called ''piecemeal leaks,'' had failed to provide a complete picture about what he suspected was a coordinated Chinese plan to contribute money to Mr. Clinton's re-election effort.

''I believe that it is in the public interest for the facts about Chinese Government efforts to subvert our elections to be brought to light,'' Mr. Burton wrote in an April 7 letter to Ms. Reno. ''The American people have a right to know the truth.''

Mr. Burton said the issue was especially timely as China was seeking admission to the World Trade Organization.

In an interview today, Mr. Burton said he was concerned that news reports quoted General Ji as saying that there were scores of conduits who had funneled money to the Democrats. ''I want to find out what he said and how extensive the additional channeling of funds was,'' Mr. Burton said.

White House officials and leaders of the Democratic National Committee have repeatedly said they did not know the source of Mr. Chung's money, or the background of several guests that he brought to Democratic events, including Ms. Liu.

Brian Sun, a California lawyer who represents Mr. Chung, said today that his client would testify truthfully under subpoena.

''I am going to work very hard to avoid this turning into a partisan circus, because that is what this could very easily become,'' Mr. Sun said.

He said several other committees in Washington had recently sought Mr. Chung's testimony, including the intelligence committees in the House and the Senate. ''The question remains as to how this is going to be coordinated,'' Mr. Sun said.

Mr. Chung's cooperation in the inquiry helped him avoid a prison sentence. Thanks to a recommendation of leniency from prosecutors, he was sentenced to probation and community service in December.

Lawyers on Mr. Burton's committee have been especially interested in Mr. Chung, who they said today ''captured the essence of the campaign fund-raising scandal when he observed, 'I see the White House is like a subway; you have to put in coins to open the gates.' ''

Photo: Johnny Chung is to testify on reports that China tried to influence the 1996 Presidential election. (Associated Press)